Truth and Theory (on US Wealth)
(Vérité et théorie)
SECTION 1: Truth of $800 Billion Deficit
IMF has estimated the the total amount of the subprime loan related deficits to be about $800 billion dollars.
My rough estimation was $400 billion dollars as two million US poor house-owners cannot pay their obligatory 200,000 dollar loans.
I also suppose non-subprime housing-loan deficits might be mingled, and a magnified loss leveraged by option transactions might be also included in the IMF calculation.
Investment and dealings on credit based on expected profits from owing securitized subprime-loan-embedded financial commodities might trigger another default, adding another amount to the deficits at issue.
Anyway, $800 billion is a scale of the Japanese National Budget.
And as I wrote yesterday, specifically everything began with false (too high) rating on the subprime-loan-embedded financial commodities.
It is because the false (too high) rating worked as an excuse for financial sector workers to deal with such dangerous financial commodities as if they had been something like Japanese high-quality industrial goods.
SECTION II: Another Theory on US Housing Loan Bubble
Since Europe and Asia have financed most of the US Treasury's budget deficits in recent decades, Americans haven't had to do this. As a result, their bond market has been freed from government bond issues, so US investors have been able to put their money into the stock market and real estate, for better or worse. As these markets rose during the 1980s and '90s, they attracted foreign private-sector dollars into the US market. This helped finance the bubble.
(A discussion with Michael Hudson over his book Super Imperialism)
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http://www.michael-hudson.com/books/super_imperialism_alist_discussion.html
Put more correctly, it is Japan that have mostly financed most of the US Treasury's budget deficits in recent decades (though China is now following suit of Japan).
(Japan and China are now only two countries that have more than $1 trillion foreign reserves, purchasing mostly US Treasury bonds, the fact of which most of US citizens unbelievably do not know.)
But why?
Mr. Michael Hudson correctly pointed at the fact that Japan has had to do so because Japan must secure the U.S. market.
In other word, for Japanese companies such as Toyota and Sony to freely play in the US market, the Japanese Government has to buy the Treasury bonds as a quid pro quo.
Anyway, consequently, without worrying about a need to bolster the US Government by purchasing Treasury, US financial institutes and private investors could concentrate on more profitable sectors, such as the housing loan market, which excessively exploded to trigger the sub-prime loan bubble accompanied by excessive competition for higher performance among financial sector workers in Wall Street.
SECTION III: A Forbidden Book
Mr. Michael Hudson is a uniquely insightful author; but his book was forbidden being published in Canada or being fully translated in Japan.
http://www.amazon.co.jp/Super-Imperialism-Origin-Fundamentals-Dominance/dp/0745319890
I do not trust those who advertise a conspiracy theory, using big money that can be only provided by a big organization.
But, we may have to check again “A discussion with Michael Hudson over his book Super Imperialism”:
The recent investigations and prosecutions of New York Attorney General Eliot Spitzer have shown that the largest financial institutions have operated much like criminal enterprises, from Citibank/Travellers and Merrill-Lynch on down. They've come under indictment, but when the problem is so widespread they've decided that the only reasonable response is to begin enforcing a new set of rules, and let bygones be bygones. The bygones in this case have netted them billions of dollars, which they will be allowed to keep. The small investors who've been cheated will not get much after attorney's fees are paid.
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And, we are seeing various related facts in the news nowadays that tell everybody involved in the dark side of Wall Street can be contaminated, too, thus making it impossible to sternly regulate and prevent criminal financial schemes, such as sub-prime loan embedded securities, from being widely traded.
SECTION IV: The Bank of Japan Governor
In Japan, “Minshuto (Democratic Party of Japan) decided Tuesday to reject the government's latest nominee for Bank of Japan governor, leaving the central bank chief's seat vacant for the first time since the end of World War II.”
http://www.asahi.com/english/Herald-asahi/TKY200803190082.html
You had better consider this rare blunder in the government performance in the context of the above “A discussion with Michael Hudson over his book Super Imperialism”:
People are now beginning to raise the question of whether countries really need their central banks, which are essentially lobbyists for the Washington Consensus, as are the World Bank and the IMF...
Central banks are staffed by Chicago School monetarists, and are allowed to take only a 3% deficit whereas in the US it is limitless. Europe and Asia should abandon the false start with their central banks and should rely on their Treasuries, which are Keynesian or could be Keynesian. The national Treasuries should set up a credit system with bonds and IOUs based on euros and other currencies...”
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Mr. Michael Hudson also issued a warning to Japanese scholars and economists who have learnt in universities in the U.S. to get doctor’s degree.
( http://www.ashisuto.co.jp/corporate/totten/column/1176317_629.html , Our World of Ashisuto K.K.)
Those Japanese like to behave like Americans, believing that Americans are friends.
But, the truth is, according to Mr. Michael Hudson’s theory, that US leaders in politics and economy intend to brainwash Japanese elites on purpose, so that they support the scheme of trading the purchase of US Treasury bonds with free access to the US market.
But, such a scheme has eventually led to laxity in moral of US financial sector workers, since more and more dollars are provided by foreign countries such as Japan for Wall Street.
It is indeed difficult for Japanese citizens to choose a non-brainwashed Governor of Bank of Japan who can sternly regulate and prevent criminal financial schemes, such as sub-prime loan embedded securities, from being widely traded in Japan in case.
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Finally, Jesus Christ said that if you were a soldier, you must not bully citizens to offering money and goods for you.
If you are a financial sector worker, you must not try to gain any profits through an act in bad faith or against your conscience.
If you are US elites, you must not try to brainwash young Japanese elites learning in Universities in America.
(Truly, everything is related to one another.
So, good girls and Mlles., that is why I am sending an alert so that you will not access the wider way for wealth, relying on workers in Wall Street or brainwashed Japanese elites.
Indeed, you had better walk under the sun with full freedom, say, on a boardwalk of a port.)
“Do Not Judge Others, so that God Will Not Judge You”
(Verurteilt nicht andere, damit Gott nicht euch verurteilt)